How to Overcome Healthcare Accounts Payable Challenges With Automation
by The Ottimate Editorial Team
Working in healthcare is not for the faint of heart. And managing accounts payable in healthcare, with all of its challenges and complexities, requires master-level skills, hours of manual labor, and unlimited patience.
But AP automation offers a simpler, less arduous path. With automated workflows that can be customized to fit your organization’s needs — whether you’re at a primary care facility, hospital, or assisted living facility — you can handle your key AP operations with a few clicks.
Let’s take a look at some of the challenges healthcare AP teams face and how automation can help steer your staff to smoother waters.
Accounts Payable in Healthcare: 4 Common Challenges and How AP Automation Can Help
1. Navigating Complex Accounting Structures
Every healthcare organization has its own unique cost centers, vendor relationships, and accounting requirements — all of which greatly impact your AP. And if you have multiple healthcare entities operating under one company, managing accounts payable becomes even more complicated.
Without the right AP automation software, these complexities can lead to errors in expense allocation, approval bottlenecks, and overall inefficiency. On the other hand, an effective AP automation solution can provide the following capabilities to help simplify and streamline your accounting processes:
Automatic coding
Many healthcare facilities have distinct coding preferences, and manually coding invoices to your general ledger (GL) accounts can be a major time-suck for your team. Instead, you can use AP automation to automatically capture and code line-item details from invoices to your chart of accounts — leading to faster, more accurate coding.
Custom dimensions
Healthcare organizations require meticulous tracking of expenses across various accounting dimensions, including cost centers, profit centers, locations, and GL accounts. The most robust AP automation tools enable granular expense tracking with unlimited custom dimensions that align seamlessly with existing information in your ERP or accounting system, providing greater visibility and insight at the transaction level.
Invoice splitting
Spittling invoices is a common AP challenge for multi-location organizations, including healthcare. With AP automation, you can split an invoice (and even invoice line items) between multiple GL accounts based on custom-built rules.
Automated approvals
Relying on an inefficient approval process can lead to delays, errors, compliance issues, and other challenges — especially in healthcare facilities with complex organizational structures. AP automation software allows you to build custom workflows to reflect your internal approval policies and hierarchies, and will automatically route invoices and payments to the right people for approval.
Learn how West Harbor Healthcare uses Ottimate’s Invoice Automation solution to cut down their invoice processing time — including coding, approvals, and reporting — from 15-20 hours per week to only 30-45 minutes a day.
2. Ensuring Regulatory Compliance
The healthcare regulatory landscape is ever-changing, often delivering new requirements that organizations must comply with. And while the Chief Compliance Officer (CCO) typically manages activities like monitoring and auditing, every team is responsible for adhering to specific requirements to remain compliant — including accounts payable.
As an AP professional, your job is to mitigate risk, prevent fraud, and ensure compliance with payment regulations and standards. Here’s how AP automation can help:
- Safeguard payments: Internal controls like three-way matching, approvals, and segregation of duties help prevent fraudulent and unauthorized payments.
- Keep data secure: Built-in security measures like bank-level security, role-based permissions, and single sign-on (SSO) help keep AP data secure and confidential.
- Provide accurate records: Automated invoicing and payments reduce errors while providing detailed audit trails of every transaction, allowing you to respond to audits quickly and confidently.
As you know, healthcare organizations must comply with additional information security standards to protect provider and patient data. The best AP automation tools enable HIPAA compliance and take the additional steps to secure voluntary, industry-standard certifications like SOC 2.
3. Overcoming Staffing Shortages
Staffing challenges in healthcare are ongoing, from the back office to front-line patient engagement.
In fact, there will be an estimated shortage of up to 3.2 million healthcare workers by 2026, according to a fact sheet by American Hospital Association (AHA). These shortages extend beyond direct patient care, and can have detrimental effects on patient outcomes.
One key culprit is burnout, which affects individuals in various roles — including accounts payable. If your team is burdened with tedious, routine tasks — like data entry, payment processing, and reconciliation — you’re likely working overtime to process hundreds, or even thousands, of invoices each week.
AP automation can help take these essential yet mundane tasks off your plate, helping your lean (but mighty) staff maximize their productivity within working hours. Yes, that includes coding invoices, matching POs, scheduling payments, and reconciling data to your existing accounting system — in one unified platform and with minimal human intervention.
Automate Your End-to-End AP Lifecycle
Ottimate’s AP automation AI delivers powerful and customizable workflows to help you automate your entire accounts payable process, from capturing and coding invoices to syncing data to your ERP or accounting system.
4. Maintaining Business Continuity Amid Change
Disruption is the norm in healthcare, from mergers and acquisitions to evolving demographics, patient expectations, and technology. Navigating these changes can be daunting, especially if your team relies on disjointed processes that span multiple departments and applications.
So how can you maintain your AP operations while undergoing large organizational shifts? Centralize your invoice and payment processes.
With end-to-end AP automation, you can consolidate your workflows into one platform, creating a single source of truth for your accounts payable that remains constant despite changes. That means capturing and coding invoices, matching purchase orders, routing approvals, and processing payments — all in one place.
And with remote access, invoices and payments can be processed and approved from anywhere and any device, helping you avoid disruption and keep your AP process moving without a hitch.
Overcome Common Healthcare AP Challenges with Ottimate
From complex accounting structures to severe staffing shortages, healthcare organizations face unique challenges that impact the way teams manage their AP. And navigating these challenges can be burdensome if you’re using a manual and inefficient process.
Fortunately, you have AP automation at your disposal to streamline your workflow — from invoice capture to reconciliation — and alleviate the stress that comes with managing accounts payable in healthcare.
And with a virtually customizable end-to-end solution like Ottimate, you have the flexibility to build automated workflows that address the complexities of managing AP for your organization, all powered by AI that never stops learning and improving.
Learn how Ottimate is purpose-built to serve healthcare AP teams like yours by scheduling a demo today.